SYBMS SEM 3

1. CONSUMER BEHAVIOR
UNIT 3

2. Environmental Determinants of Consumer Behaviour
Family Influences on Buyer Behavior,
 Roles of different members, needs perceived and evaluation rules.
 Factors affecting the need of the family, family life cycle stage and size.
Social Class and Influences.
Group Dynamics & Consumer Reference Groups, Social Class & Consumer Behaviour -
Reference Groups, Opinion Leaders and Social Influences In- group versus out-group
influences, role of opinion leaders in diffusion of innovation and in purchase process.
Cultural Influences on Consumer Behavior Understanding cultural and sub- cultural influences
on individual, norms and their role, customs, traditions and value system.

3. Family Influences on Buyer Behavior

4. Family Influences on Buyer Behavior
Family members usually share their view and opinion on present buying pattern and future
purchases.
Family members may encourage him to buy the product or they may recommend him some
other product or may discourage him to purchase it.
Married individual’s buying behavior is different as compared to a bachelor.eg: a married man
will be keen to invest in mutual funds, insurance policies etc as compared to a bachelor
Buying behavior of men and women also differs
The buying behavior of a family with children as compared to family without children will
greatly differ.

5. Buying roles of Family
Influencer: The family member who provide information about product or service to other
family members.
Gatekeeper: the family member who control the flow and direction of the contents of
information.
Decider: the one with the power to select the product whether individually or jointly.
Buyer: the one who makes the actual purchase.
Preparer: the family member who prepares the product for actual consumption.
User: the consumer of the product or service.
Maintainer: members who maintain the product for family use and satisfaction.
Disposer: when a product has exhausted and has become obsolete it has to be disposed.

6. Family life cycle stages and Buyer Behaviour

7. Social Class
Leon G. Schiffman and Lisline Lazor Kanuk measure social class “in terms of social status”
such as profession, income, quality of neighborhood and dollar value of residence and do not
consider cash, region and other social factors stating that consumer behaviour study is different
than socio-culture study.

9. Upper Class
 Because of the wealth and the resources that this class has an access to shapes the marketing
practices geared towards them.
 Around the world, the marketers target this group with distinctive media and products. Lot of
niche marketing practices are carried for this class.
 Products class is more distinctive and customized.
 One of the main features in this class is framed by those who are new in this category and
have desire to be prominently visible in their change of social status.

10. Middle Class
:Mostly working class formulates this category.
Sizable middle class is the emerging class for many marketers as it is found that at least half of
the more than 200 nations of the world.
 Things which are important to this class include education and marriage.
 They have strong desire to move to upper social quo.
Products/brands targeted to this class shows practicality and sometimes emotional values.

11. Lower/Under Class
Lower or under class constitute the majority of the population of the world.
 This class is usually associated with less money available, minorities, low educational level
but high technical education.
 Many consumers belonging to this class are working on daily wages.
Considerable amount is spending on food items, shelter and other basic necessities of life.
Marketers target this class through the mass media.

12. Social class influence on Consumer Behavior
Consumption community

13. Group Dynamics
Group dynamics means how individuals form groups, and how one persons purchasing influ-
ences the other individual’s actions.
Now-a-days marketers use the concept of group dynamics or personal influence often as this
exceeds the power of company’s promotional efforts.
“A group may be defined as two or more people who interact to accomplish either individual
or mutual goals”.

14. Primary Group and Secondary Group
If a person interacts on regular basis with other individuals, then these individuals can be
considered a primary group. Interaction can be with members of the family, with the
colleagues, with neighbors etc., this means whose opinions are valued by that person, on the
other hand, if a person interacts only occasionally with others, or whose opinions are not
important, then this type of group is called secondary.
Difference:
Primary and secondary groups can be distinguished on the basis of perceived importance of the
group to the individual and the frequency with which the individual interacts with them.

15. Formal Group and Informal Group
This is the second useful way to classify groups on the basis of their formal nature. If a group
has a highly defined structure, specific roles and authority levels and specific goals then this is
called a formal group. For example, in an organization – a list of all employees (defined
structure), Managing Director, Manager, Assistants etc., (specific roles and authority levels),
this shows a formal group.
On the other hand, if a group is more loosely defined, then it is an informal group. For
example, four five girls who become friends in the school and now meet only once a month.
For the marketer, informal social groups are more important because of loosely defined
structure a more conducive environment is available for exchange of information to the
members.

16. Consumer Relevant Groups
Family: Importance of the family in various decisions is based on the frequency of contact that individual has
with other family members. Moreover, it is in the family an individual establishes a wide range of values,
attitudes and behaviors.
Friendship Groups:The immediate group which an individual forms after he/she moves out from the house is
friendship group.. Friends opinions and preferences are very important for influencing an individual’s behaviour
in determining the products or brands he/she actually selects. For example, marketers of products like branded
shirts, jewellery and alcoholic beverages depicts friendship situations in the advertisements- ‘Green Label’ -T.V.
commercial of alcoholic beverage. Consumers like to seek information from those friends who have values or
outlooks similar to their own. The influence of friends will be more in a purchase decision one’s an individual
finds greater similarity.
Formal social Groups:Formal social groups, as the name says, lack intimate relationship and they serve
different function for an individual. This type of group interests marketers because members often consume
products together, can discuss products or services or stores informally with other members and sometimes can
even copy the consumption behaviour of other members whom they admire.

17. Shopping Groups:Two or more people who shop together this can be either for food, for clothing
or simply to pass the time-can be called a shopping group; people like to shop with others who are
pleasant company or who they feel have more experience or knowledge about a desired product or
service. Shopping with others reduces the risk that a purchase decision will be socially
unacceptable, collective decision is the best in which none of the members knows about the product
to be purchased
Work Groups:This type of group also serves as a major influence on the consumption behaviour of
members as they spend a sheer amount of time at their jobs (around 48 hours per week).Their direct
and sustained work relationship offers substantial opportunity for one or more members to influence
the consumption related attitudes and activities of other team members. Informal friendship/work
groups consists of people who have become friends as a result of working for the same firm, they
may/ may not work together as a team. Marketers have recognized that work groups influences
consumers brand choices and sometimes even the store choice, so now they are redirecting their
sales efforts to offices and plants during lunch-hour visits.

18. Reference group
In context of consumer behavior, reference group is referred to as group to which an individual
belongs.
This kind of group is preferred as a point of comparison with another feasible group.
Reference groups exhibits some features that exerts some amount of influence on the
consumers,such as values,roles,norms,status,socialization and power.
Example: when a MBA studentwants to buy a laptop or digital camera,he would probablyseek
the opinion of his friends in one particular group who have experience of buying similar
products earlier,and he would rely on such information as a reference group.

19. Types of Reference Groups
Primary reference group : in case of primary reference group,an individual has face-to-face
contact with the group and he gets influenced directly.eg: family,friends,colleagues.
Secondary reference group: a secondary reference group is formed by individuals who meet
occasionally have some common interest with the group and gets indirectly influenced.eg:
religious leaders,trade unions,movie stars,professional associations.
Normative reference groups: When reference groups affect behaviour and attitudes through
pressures for conformity, then this is known as normative influence.Normative influence can
occur even when others do not control tangible outcomes because people are concerned with
their perceptions of what other think of them. For example- fashion conscious women receives
clear signals from their peers which product to buy so that their choices were socially correct.

20. Informational influence:
A consumer will accept information from a group if he or she considers the group a credible
source of information and expertise and if he/she believes the information will enhance
knowledge about product choices. The information can be collected directly from
knowledgeable persons or by observing the behaviour..
Informational influence is likely to be most important in two conditions.
 First, when there is social, financial performance risk in buying the product.
Second, if the individual has limited knowledge or experience regarding the product.
 For example, products like car, computer, cellular phones, fax machines etc are likely to be
purchased after seeking expert’s advice.

21. Comparative Influence:
Comparative influence means comparing oneself to other members of the group and also
judging whether groups would be supportive. Consumers constantly compare their attitudes to
those of members of important groups. They try to associate themselves with groups with
which they agree and by dissociating themselves from groups with which they disagree.
Comparative influence implies that those being influenced should have characteristics similar
to one who is influencing. A study reveals that consumers seek information from those whose
view is similar to themselves. The study says that advertisers should use spokespersons to
whom consumers perceive as being similar to themselves.
This sometimes gives the feeling to an individual that the purchase of a particular brand helps
show others what he/she is or would like to be, for example a successful business person, a
perfect housewife, athlete etc.

22. Aspirational group: an aspirational group where an individual may not ba a member of a group
or may not be having face-to-ace contact with the group,but he aspires or wishesto become
member of the group.
Disclaimant group: this is a group, whose values and behavior does not fascinate the
individual.
Avoidance group: in case of such groups,where an individual may not hold membership or
have face-to-face contact but he disapproves groups values, attitudes and behavior.

23. Factors that affect Reference Group Influence
Information
and
experience
Reliability and
credibility
Power group
Attractiveness

24. Consumer related Reference Group
Friendship group
Shopping group
Work groups
Virtual groups
Brand communities
Consumer action groups

25. In group versus out groups
In group
◦ The group with which a person associates
himself
◦ Similar behavior,attitude and opinion
◦ Based on ethnocenticism
◦ Members exhibits co-operation,mutual help.
◦ Members feel their buying behavior depends on
others
◦ Make purchases as per group norms
Out group
◦ Person does not associate himself with the group
as he is an outsider
◦ Disimiliar behavior,attitude and opinion
◦ Not based on ethnocentricism
◦ Members exhibits avoidance and disliking.
◦ Person have their own buying behavior
◦ Persons have no such intentions

26. Consumer choice process is
influenced by :
Friends
Family
Opinion Leaders

27. What is opinion leadership
The process by which one person (Opinion Leader) informally influences
the action or attitudes of others who may be opinion seekers or merely
opinion recipients

28. Opinion Leaders in Marketing
Opinion leaders are particularly useful in marketing.
If a marketer can identify key opinion leaders for a certain group, she can then direct her
efforts towards attracting these individuals.
In marketing, celebrities are often used as opinion leaders.
 Although they may not actually know more about a product or service, there is usually
the perception that they do.
 Celebrity endorsements in marketing are a way to give clout to a product or service .
 Opinion leaders can have a profound influence on the success of a product, and on one's own
consumer purchases.

29. Impact of Opinion Leaders
◦ One influential persons word of mouth tends to affect the buying
attitude of two other people on an average
◦ Incase of Online, this figures goes up to 8 people on an average.
◦ In a study of 7000 consumers in seven European countries, 60%
were influenced to use a new brand by family and friends. “
If you need to reach 2 million people then you just need to reach the right 2000 in
the right way and they will help you reach 2 million”

30. Impact is Product Specific
Expensive, Risky & Infrequently Purchased Products
◦ Laptops
◦ Automobile
◦ Real Estate
◦ Financial Investments
◦ Health Care
Products suggests Users Status or Taste
◦ Restaurants
◦ Travel Destinations / Hotels Lifestyle Products
◦ Golf accessories

31. Personality of Opinion Leaders
◦ They have a keener level of interest
◦ More knowledgeable about the product category
◦ Tend to be more innovative about their purchases than their
followers
◦ Are non-conforming, more self-confident, more sociable and
cosmopolitan and socially higher on perceived risk.

32. How Consumer Behaviour Theories Applies to
Opinion Leadership
Diffusion of Innovations
Innovators- venturesome,
the visionaries, the wild-eyed
revolutionaries, adoption is a
no-brainer.
Early Adopters-respectable
opinion leaders. They can
function effectively as
evangelists and missionaries.
Early Majority- willing to
make safe investments.
Late Majority- skeptical
Laggards- falling behind

33. Role of opinion leaders in Diffusion of Innovation
and purchase process
Informal relationship: are not paid for services
Knowledge and experience: More precise knowledge and experience about product or srvice
Product specifics: Targets products which are risky and occasionally purchased
Influencer: Word of mouth
Superior status: They have a higher status compared to followers
Credibility: They are experts in product related information
Trend setters: Sets a trend by buying new products
Celebrity endoesements:Canvassing

34. Culture
 Refers to the beliefs, customs, rituals and practice that a particular group of people follows.
As a child grows, he inculcates the buying and decision-making patterns through his family
and the key institutions.
 The culture varies from region to region and even from country to country.
 Such as the sale of “sarees” and “Lungis” is more in South than the North India.
Therefore, the marketer should carefully study all the different cultures and frame the
marketing strategies accordingly.

35. Cultural influences on consumer Behaviour
Culture is
learned
Culture is
shared
Culture is
transferred
Culture is
dynamic
Culture is
symbolic
Culture
helps in
adaptation

36. Subculture
The culture can be further divided into subculture wherein the people are classified more
specifically on the basis of their shared customs and beliefs, including religions, geographic
regions, nationalities, etc.
 The different sub-cultures forms several market segments whose needs can be carefully
studied by the marketer, and the strategic marketing decisions can be taken accordingly.
Such as the needs of the people living in metro cities and the ones living in B-grade cities must
be identified before the launch of the marketing campaign.

37. Sub-cultural category Variations (examples)
Religion Hindu,muslims,Sikhs,Christians,jains,parsi
Geographic location North,south,east,west
Age group Teens,youth,middle age,elderly
Gender Male,female
Occupation Service,professionals,businessman
Social class Lower,middle,upper
Sub-cultural influences on individual

38. Components of sub-culture
Demographic
Social class
system
Age
Regional
sub-culture

39. Norms and their role
Norms refer to accustomed behavior
Norms are unwritten rules and guidelines which prescribes specific behavior of how to behave
in particular situations.
Norms are applicable only to behavioiur and not to any personal thoughts or feelings.
Norms are society’s collective expectations about what kind of behavior an individual shoul
possess.
Norms can influence consumer’s prefrences and behavior

40. Customs
Custom which is also known as tradition,is a law or usual ay,that is not written and in oractice
since long time.
Customs connects together the members of society.
Family is the core that imparts cutoms to its members
India has diverse cultures,customs and religions which includes festivals that are celebrated
throughout the year.

41. Customs
Custom which is also known as
tradition,is a law or usual ay,that is not
written and in oractice since long time.
Customs connects together the
members of society.
Family is the core that imparts cutoms
to its members
India has diverse cultures,customs and
religions which includes festivals that
are celebrated throughout the year.

43. Review Questions
A tours and travel agency has hired you to develop a marketing strategy for a vacation
package.develop a complete package for upper and middle class.Discuss the services
offered,pricing,message and media choice.
Do you think that changing status of women in society has brought about changes in the family
decision process?. Substantiate your answer.
Collect two ads that exert normative and informational influence.discuss the impact of these
ads on consumers,
Identify famous opinion leadersrelated to clothing styles,music system and mutual funds.why
do you think they are fit to be opinion leaders
Discuss the basic properties of a group.how do these relate to consumer behavior?